ZURICH (Reuters) - The Swiss and U.S. governments are considering a possible solution to a long-running dispute over Swiss banks accused of helping wealthy Americans evade billions of dollars of tax.
A source familiar with the talks has told Reuters the two sides have agreed an outline for a deal that would divide over 300 Swiss banks according to the extent to which they had helped U.S. clients hide money, to determine how they are dealt with.
A Swiss government spokesman said on Wednesday the cabinet had been informed about a solution to the dispute. He declined to give further details as the negotiations are ongoing.
A senior U.S. government source involved in the Swiss banking cases confirmed a proposal was being circulated.
Bank secrecy, which has helped Switzerland become the world’s largest offshore centre with $2 trillion in assets, has come under heavy fire since the financial crisis as cash-strapped governments have sought to clamp down on tax evasion.
Tax evasion has dominated global headlines in recent weeks following the admission by a disgraced former French minister that he held a Swiss account and the recent leak of thousands of holders of secret bank accounts worldwide.
The Swiss government has been in protracted talks to end U.S. investigations into Swiss banks, including Credit Suisse CSGN.VX and Julius Baer BAER.VX, in return for expected heavy fines and a transfer of client names.
On Tuesday, U.S. authorities charged a Swiss banker and a Swiss attorney with helping American clients hide millions of dollars in offshore accounts to evade taxes.
Zurich-based Bank Frey confirmed on Wednesday that it was named in the indictment along with its head of private banking Stefan Buck, who was charged with one count of conspiracy.
“Bank Frey emphasizes that the defendant is presumed innocent unless and until proven guilty,” it said in a statement, adding it was reviewing its legal situation before commenting further.
Attorney Edgar Paltzer of Swiss law firm Niederer Kraft & Frey (NKF) was also charged with conspiracy in the same indictment. NKF partner Andreas Casutt said in a statement Paltzer was leaving the firm, but declined to comment further. Paltzer also declined to comment.
German prosecutors said on Wednesday they were investigating employees of Credit Suisse and its units Clariden Leu and Neue Aargauer Bank on suspicion of helping Germans evade taxes.
Several leading European Union countries have announced a joint push against tax evasion, a message they will take to the meeting of G20 finance officials in Washington this week.
Swiss Finance Minister Eveline Widmer-Schlumpf, who heads to Washington to join the meeting on Thursday, said all countries should be treated equally in the drive for bank transparency.
“We consider it very important that rules must apply to all and are engaging ourselves for a level playing field in multilateral forums,” she told Reuters in written responses to emailed questions.
Switzerland often complains it is unfairly targeted compared to other financial centers and sees the “offshore leaks” affair as helping redress the balance as most of the accounts were in other tax havens like the British Virgin Islands.
“Recent revelations have confirmed that various financial centers in America and Asia do not comply with international standards,” Widmer-Schlumpf said.
Widmer-Schlumpf is expected to discuss further the outline deal with the United States during her trip to Washington.
Negotiations have stalled in the past because Washington had demanded client data going back as far as 2002 - which Berne said it could not deliver due to strict Swiss bank secrecy laws - and because U.S. authorities want to keep up pressure on tax evaders to come clean under an amnesty launched last year.
The deal now under consideration would involve banks only handing over data back to 2009, when Switzerland and the United States signed a new double-taxation pact which allows the transfer of information on more clients, the Swiss source said.
In return, Swiss negotiators are working on a plan to deliver codified data detailing the money trail for those who withdrew money before 2009 and placed it in other tax havens instead, the source said.
The agreement would mean banks already under investigation should settle with individual deferred prosecution agreements, while a second group of banks which had U.S. clients but have not yet been targeted by investigators would also have to agree to pay fines and hand over data on their customers.
Credit Suisse, which has already made a 295 million Swiss franc ($318.35 million) provision towards settling the investigation, declined to comment. The Swiss Bankers Association also declined to comment.
The country’s biggest bank UBS UBSN.VX was forced to pay a fine of $780 million in 2009 and hand over the names of more than 4,000 clients, delivering the U.S. authorities information that allowed them to then pursue other Swiss banks.
Switzerland’s oldest private bank, Wegelin & Co, said in January it was closing down after pleading guilty to helping Americans evade taxes, paying a fine of nearly $58 million.
Additional reporting by Oliver Hirt, Kim Dixon and Joseph Ax; Editing by Mike Collett-White